The persistently high inflation and economic uncertainty indicate that the stock market could remain choppy in 2023. However, investors can still earn a regular income from stocks that pay a monthly dividend. Against this background, we have zeroed in on Agree Realty (NYSE:ADC) and Realty Income (NYSE:O) stocks for investors who seek reliable monthly passive income.
Let’s dig deeper to understand why these stocks are an attractive investment option for a monthly cash inflow.
Agree Realty operates as a REIT (Real Estate Investment Trust) focusing on top U.S. retailers. It pays monthly dividends backed by its high-quality assets and tenant base. Also, its high occupancy rate (99.7%) and long lease expiration term of 8.8 years augur well for growth.
In addition, the company’s strong balance sheet and low leverage position it well to deliver solid returns in the coming years. ADC’s dividend has increased at a CAGR of 6.1% in the past decade. Meanwhile, it pays a monthly dividend of $0.24 a share, translating into a yield of 3.9%.
ADC stock has a bullish signal from analysts. It has received six Buy and one Hold recommendations for a Strong Buy consensus rating. Meanwhile, analysts’ average price target of $78.36 implies 6.06% upside potential.
Realty Income recently increased its monthly cash dividend to $0.2545 per share from $0.2485 a share. This marks the 119th dividend increase since it went public in 1994. Its strong dividend payment history and consistent dividend growth make it a top stock for generating reliable monthly cash.
Realty Income is also a member of the S&P 500 Dividend Aristocrats index, which includes companies that have increased dividends consistently for at least 25 years).
Realty Income operates as a REIT and benefits from the high occupancy of its properties. Also, its highly diversified tenant base and long-term leases add stability to its business and support dividend payouts.
It has three Buy and six Hold recommendations for a Moderate Buy consensus rating. Meanwhile, analysts’ average price target of $69.38 on Realty Income stock implies an upside potential of 4.49%. Further, based on the new monthly dividend, it offers a forward yield of 4.6%.
These REITs have a high-quality tenant base, solid occupancy levels, and long-term leases that help them generate solid cash flows to support their payouts. Also, these companies have a history of solid dividend payments and growth, making them a reliable bet.